Farmers stare at hard times as tea prices take a dive

Tea farmers are staring at hard times ahead as the commodity’s price continues to decline at the Mombasa auction two months in a row.

According to East African Tea Trade Association (Eatta) managing director Edward Mudibo, the commodity prices declined by $2 (Sh207.6) per kilogramme (kg) to $1.76 (Sh182.7) per kg prompted by low demand by main consumers despite increase in volumes.

“In the last two months, we have experienced a decline of Sh207.6, the highest since 2014. This is the lowest price we have witnessed.

We are hoping things will get better as we approach 2020. We are encouraging farmers to continue producing more quality tea as market prospects are promising,” said Mudibo.

Record low 

According to the market report, tea prices had been on an upward trend in the last five years before a sharp decline hit the market.

In 2012, Kenya exported more than 350 million kgs. In 2013, some 440 million kgs were sold with 2014 recording a small decline to 432 kgs. Last year about 490 million kgs was sold.

“This year, we have received a lot of tea at the auction but have had fewer buyers, causing prices to shrink. Farmers might get small or no bonuses,” said Mudibo.

However, he expressed optimism that tea prices will increase significantly.

“We are hoping that by end of this month prices will increase to $2.5 (Sh259.5),” he added, and attributed major drivers to the sales decline, to the weakening of the currency in Pakistan and Egypt and the effects of Brexit.

The recent uprising in Sudan has also been cited for the declining prices. Sudan had also been questioning the quality of tea it was importing from Kenya. 

Sudan raised issue with the expiry date of Kenyan tea, a move that prompted a joint scientific research to determine the actual sell-by date of the beverage.

In January this year, Sudan bought 1.14 million kgs of tea at Sh230 per kg, which was a double-digit growth from 631,859kgs that it bought in a corresponding period last year.